Under perfect capital mobility
a. there are no restrictions on buying financial assets, though there may be on buying factories and equipment.
b. transactions costs have to be zero.
c. differential risk in assets across countries are minimal.
d. All of the above
e. None of the above
C
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When we use money to purchase goods and services, we are using money as a
A) reserve of wealth. B) unit of account. C) medium of exchange. D) bartering tool. E) store of value.
An example of the commodity substitution bias in the calculation of the CPI is a price increase in
A) turkey when the price of chicken doesn't rise. B) a GPS unit versus a AAA map book. C) a 2014 Toyota Camry versus a 2005 Honda Civic. D) etexts versus used books bought through Craigslist. E) new homes because people's incomes have increased.